YOUNG KING MING v. CHENG KIN LUNG

bjbj CACV000171/1990 IN THE COURT OF APPEAL Civil Appeal No. 171 of 1990 BETWEEN YOUNG KING MING Plaintiff (Respondent) and CHENG KIN LUNG Defendant (Appellant) ------------------------- Coram : Hon. Sir Derek Cons, V.-P., Kempster & Clough, JJ.A. Date of hearing : 7th June 1991 Date of delivery of judgment : 7th June 1992 ----------------- JUDGMENT ----------------- Clough, J.A.: In dealing with the question of further evidence I am proposing to set out briefly the background of this case, so that it will not be necessary to do so when dealing with the substantive appeal. The defendant in this action appeals against the order made on the 3rd September 1990 in the District Court, by Deputy Judge Tsang, requiring the defendant to pay to the plaintiff the sum of $30,000 with interest. The plaintiff's claim for that sum had been brought under two heads, namely (1) $15,000 being 2 months arrears of rent incurred between 21st February and the 20th April 1988 in respect of the parol sub-tenancy of part of the plaintiff's office premises granted on the 21st December 1987 at the monthly rent of $7,500 and (2) $15,000 being the outstanding balance of a loan of $100,000 made by the plaintiff to the defendant on the 15th April 1988. It was common ground that the loan had been made, that the defendant had repaid $20,000 on the 20th July 1988 and another $65,000 after the plaintiff had obtained summary judgment for that sum in these proceedings which were originally brought to recover only the balance, namely $80,000, of the loan after payment of the $20,000. The defendant had resisted the plaintiff's application for summary judgment for $80,000, contending that the plaintiff owed him $15,000 with interest as a result of a payment of $15,000 made by cheque by the defendant to the plaintiff on the 21st December 1987. The plaintiff's case was that this cheque had been given to him by the defendant in respect of the initial one months rent and rental deposit when the sub-tenancy was created. Accordingly the plaintiff was given summary judgment for $65,000, being $80,000 less the disputed claim for $15,000. However the plaintiff subsequently amended his particulars of claim so as to claim (1) the $15,000 representing the balance of the original loan and (2) a second sum of $15,000 as arrears of rent. The defendant's case was, as already indicated, that his cheque for $15,000 had not been given to the plaintiff as rent, but as a loan which he claimed to set off against the balance of the loan. He also claimed interest on that sum. Both parties appeared in person at the trial. The plaintiff gave evidence and called one witness, a Mr. Chan Ho Ming. The plaintiff's evidence was that he was the tenant of premises in Central. On the 21st December 1987 he had, he said, sublet part of the premises to the defendant after the latter had been introduced by Mr. Chan. It was then, according to the plaintiff, that the defendant gave him a cheque for $15,000 representing a month's rent and a rental deposit and the plaintiff gave the defendant the keys of the premises on the understanding that the defendant proposed to engage decorators to decorate the sub-let premises. The plaintiff said that two decorators subsequently inspected the premises, took measurements and prepared a layout plan, but no work was ever done. The plaintiff explained the absence of any written evidence of the sub-letting by saying that he had a lot of confidence in Mr. Chan, his friend (and former father in law), who had introduced the defendant to him, and he also trusted the defendant who had told him that an agreement would be signed in the name of the joint venture company he was going to set up with people in China. The plaintiff said that in March - he said it was the 20th March 1988 - by which time no further rent had been paid, he approached the defendant for rent and was asked to wait because the defendant was still negotiating the formation of the joint-venture, so that the premises could not yet be decorated. According to the plaintiff he waited until the 20th April 1988 when the defendant told him he no longer intended to rent the premises. Thereafter, on the 28th April 1988 the plaintiff sub-let the premises to another friend. The plaintiff also gave evidence, which was not materially in dispute, regarding the loan of $100,000 to the defendant on the 15th April 1988. Mr. Chan supported the plaintiff's evidence. He was the former father in law of the plaintiff and a friend of the defendant, claiming, as the defendant later confirmed in evidence, to be a clansman of the latter's wife. The defendant gave evidence admitting that he had gone to the plaintiff's premises on the introduction of friend", namely the plaintiff who was in dire difficulty, who had made a mistake in 1985/6 and gone to jail for false accounting but that he was a very smart person. The defendant said Mr. Chan suggested that the defendant should rent the plaintiff's premises and that the plaintiff could be his secretary. However, according to the defendant, when he went to the premises he found they were the office of his former accountant, a Mr. Wong, and, when he asked Mr. Wong why he had moved out, Mr. Wong told him that the plaintiff was "a nasty fellow" and that the defendant would suffer if he got close to him. This resulted in the defendant deciding not to have any dealings with the plaintiff, but the latter had sought his help in his difficulties and had told him he was 4 months in arrears with his rent and about to be dispossessed by his landlord. The defendant further said that the plaintiff had asked him to lend him $15,000 irrespective of whether he would rent the premises or not and that the defendant could have time to decide whether to take the premises. This resulted in the defendant lending him $15,000 because he was sympathetic to his situation. The defendant also gave evidence about the loan of $100,000 made to him by the plaintiff which was not materially in dispute. The judge preferred the evidence of the plaintiff to that of the defendant on the crucial issue in the action, namely whether the defendant's cheque for $15,000 drawn in favour of the plaintiff on the 21st December 1987 had been paid as a loan or as rent and a rental deposit. The defendant now applies under Order 59 rule 10(2) for leave to adduce a substantial volume of further evidence in this court. The summons has been served short and includes an application for abridgment of time. The proposed evidence consists of the draft affirmation of Mr. Chan Chung Ngan which it was proposed to have sworn when he is available (I gather that he is now available for the purpose) and an affirmation of the defendant's solicitor Mr. K.T. Poon sworn as recently as the 4th June. There is also an affirmation sworn by the defendant on the same date. This is evidently intended to be included in the application but not mentioned in the summons which includes a reference to a number of documents referred to by letter reference (a) to (i) which are, I apprehend, exhibited to one or other of the affirmations. The matters which are sought to be raised by the further evidence are briefly as follows: (1) The draft affirmation of Mr. Chan Chung Ngan indicates that he is to affirm that he is a personal assistant of the defendant who is an honest person and that between December 1987 and April 1988 he had no knowledge of the tenancy agreement alleged by the plaintiff, or of any use of the premises by the defendant, or any instructions by the defendant to decorators in respect of the premises. The defendant in his affirmation affirms that he had intended to call this witness at the trial after hearing the evidence of the plaintiff and his witness but decided not to do so for various reasons. (2) The right or otherwise of the plaintiff to sublet part of the premises. Mr. Poon affirms at length about his efforts to obtain evidence from the plaintiff s landlord that the plaintiff did not (contrary to his evidence at the trial) have his landlord's permission to sub-let the premises. These efforts have resulted in Mr. Poon being able to give only questionable hearsay evidence on this matter because the landlord adopts an old fashioned attitude to being involved in litigation. (3) The criminal record of the plaintiff. This is now abandoned on the basis that his conviction (i.e. his conviction for false accounting offences) was in fact common ground before the judge. Mr. Poon's correspondence with the police and the Registrar of the Supreme Court on this subject and the Court of Appeal judgment is exhibited to Mr. Poon's affirmation. (4) The allegedly bogus professional qualifications appearing on the plaintiff's name card. Mr. Poon exhibits correspondence he had subsequent to the trial with the Hong Kong Society of Accountants which supports the contention that the accountancy qualifications claimed by the plaintiff on his name card were not genuine. Mr. Poon had obtained the card in question from a Mr. Michael Wong, a retired legal clerk with more than 20 years litigation experience, who had assisted the defendant in the preparation of his case before the trial. The effect of Order 59 rule 10(2) is that, where there has been a trial followed by an appeal and the further evidence sought to be adduced on appeal relates to matters other than matters which have occurred after the date of the trial, that evidence will only be admitted where special grounds are shown. In that respect the court applies the three rules laid down in Ladd v. Marshall [1954]1 WLR 1489 (C.A.), namely: (1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial. (2) The evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive. (3) The evidence must be such as is presumably to be believed i.e. it must be apparently credible though it need not be incontrovertible. Mr. Poon in his affirmation has affirmed that the defendant acting in person could not reasonably be expected to have been able to obtain and produce at trial the evidence now sought to be adduced on appeal. He also expresses the belief that if that evidence had been before the trial judge he "would have come to a substantially different determination . I disagree. Mr. Chan Chung Ngan's evidence was available to the defendant but he decided not to rely on it. The requirements of rule 1 in Ladd v. Marshall have not been complied with. Moreover, assuming this witness's evidence to be credible I cannot accept that, to the extent that it were admissible, it could have any important influence on the result of the case. The question whether or not the plaintiff was entitled to sub-let without permission of his landlord could have been ascertained on discovery. That eliminates any reliance on surprise. As to the question of actual permission from the landlord, that again is a matter which could have been ascertained, after discovery, by reference to the landlord, and if necessary by subpoenaing an officer of the landlord company. Moreover the hearsay information now available on this matter does not in my judgment amount to admissible evidence. Furthermore, if the plaintiff had subpoenaed an officer of the landlord company on this matter he would have obtained admissible evidence on this point. Finally the relevance of this matter only concerned credibility on which evidence in rebuttal is not admitted. As to the evidence regarding the plaintiff's bogus accountancy credentials on his card, even if reasonable diligence could not have obtained this evidence it is in my judgment overshadowed by the evidence of the plaintiff's conviction for false accounting which clearly showed the judge what kind of a man the plaintiff was. I do not consider this last category of evidence which raises a new issue not raised at trial would have had an important influence on the result of the case. I would therefore refuse the defendant's application to adduce further evidence. Cons, V.-P.: I agree with my Lord. In my view the evidence was available with reasonable diligence in the sense in which those words are used in Ladd v. Marshall. Defendants in person, or any party in person, are usually given a great deal of latitude by courts in the actual conduct of their case, so long as this does not cause prejudice to the other side. But that does not extend to giving an unrepresented defendant a chance to start all over again, with qualified help, simply because he has lost on the first occasion. Secondly I think that the judge was well aware of the nature of the plaintiff and that the further evidence, that it is now sought to adduce, would have had very little, if any, effect upon his decision. Kempster, J.A.: I also agree. An application to adduce fresh evidence does not even get off the ground if the issues to which it is said to relate were not raised at trial. The matters here sought to be adduced in evidence go at best to matters of credit in relation to which, as my Lord has observed, fresh or contradictory evidence is not permitted. (Further submission for Appellant, counsel was heard) Clough, J.A.: I have dealt with the background of this appeal when dealing with the application for leave to adduce further evidence. The learned judge, having considered the evidence and reserved his judgment, found in favour of the plaintiff on the issue concerning the $15,000 claim. He concluded that the defendant was a man of substantial business experience and explained why. He came to the conclusion that it was too much of a coincidence that the $15,000 cheque could have been in respect of a loan. He considered it was unlikely that a man with the defendant's experience would have lent such an amount to the defendant without any documentary evidence whatsoever, particularly as, on the defendant's evidence, he had been warned by Mr. Wong, the accountant, that the plaintiff was "a nasty fellow". The judge therefore was unable to accept the defendant's evidence that the cheque payment had simply been a loan given out of sympathy. The judge had formed a very unfavourable impression of the defendant. He was the seeing and hearing judge and concluded that the defendant was a man who was prepared to say anything to delay the repayment of the loan in question. The judge went on to say that he was satisfied that the plaintiff was truthful and that he was particularly impressed by his supporting witness Mr. Chan Ho Ming. He mentioned that he was the plaintiff's father in law, but added that he had also been a friend of the defendant for a number of years, and so, the judge commented, he could not see why Mr. Chan should assist the plaintiff. Towards the end of his judgment the judge mentioned that there were a number of minor discrepancies about dates in the plaintiff's evidence and that he considered these were genuine memory mistakes and were not material. On appeal it is contended that that decision of the judge was against the weight of the evidence. Mr. Cheung, who has very helpfully cited the relevant authorities to us, has accepted that he is taking on a heavy burden here. At the conclusion of his submissions he has indicated that he thinks that the most he feels that he can ask this court for is an order for a retrial. The matters which in the event have been relied upon in argument today are as follows. First, there is the question of discrepancies regarding the occasion upon which the plaintiff said that he had taxed the defendant with the non-payment of rent. The plaintiff had initially said in chief that it was in March that he did this. He said he "got hold of" the defendant. He then added that it was on the 20th March. There was cross-examination of the plaintiff about this by the defendant. The question that was put by the defendant to the plaintiff was: "If my office was on your premises why should I speak to you on telephone on 20/3/88?" to which the answer was: "First of all, I did not say such a thing in my evidence; what I said was you made a request to me to allow you more time because your negotiation with other people from China can't yet be finalised." There are two matters raised on behalf of the defendant in connection with this evidence. The first matter is the date. The defendant produced his travel document, which he used to travel to China, to demonstrate that he was in fact out of Hong Kong between the 19th and 22nd April, so that if there had been a direct confrontation between the plaintiff and the defendant it would not have been possible for it to occur on 20th March 1988. As far as that aspect of the matter is concerned I, for my part, consider that the judge was entitled (as he appears to have done by implication) to treat this discrepancy in the plaintiff's evidence as being one concerned with dates and memory, and I would not fault the judge on that. The second point is that the plaintiff put in what he called a respondent's notice when this appeal was brought in which he stated that the confrontation in question had occurred on the telephone. It is suggested that that demonstrates the plaintiff's evidence was unreliable. For my part I regard the record of the evidence which I have read out as being a difficult passage, in connection with the telephone point, because the reference to the telephone was made by the defendant in a situation where the plaintiff had never referred to a telephone conversation in his evidence in chief. Secondly, the sentence begins with "If my office was on your premises". It is clear to me (and I think it must have been clear to the judge) that it was never any part of the plaintiff's case that the defendant had been actively occupying the premises or any part of the premises as his office. It is simply a situation where, on the plaintiff's case, there had been an agreement to let part of the premises, but the defendant had never actually gone into occupation, apart from sending decorators to the premises. I, for my part, would not attach any great weight to the objections to the judgment based on this matter. The second point was concerned with the conviction of the plaintiff, which is obviously a highly material matter in relation to the credibility of the plaintiff, particularly as he was convicted of offences of dishonesty. It is contended that the judge should have referred to the conviction and said that he was satisfied with the evidence of the plaintiff notwithstanding the conviction, if that was his view. For my part, again, I do not accept that it was necessary or essential that the judge should nave expressly referred to this conviction in his judgment, particularly as the defendant had emphasised it in his closing submission, and as there was a reference by the judge to the defendant's evidence that the plaintiff was described to him as "a nasty fellow" by Mr. Wong. The references to the convictions of the plaintiff were frequent in the record. I would not be prepared to accept that the judge had overlooked, or given insufficient weight to, the fact of these convictions when assessing the credibility of the plaintiff, particularly in the light of the other evidence. I emphasise the other evidence because there was supporting evidence of the plaintiff's evidence in this case. The third point is concerned initially with the judge's reference to his inability to accept what he called the "coincidence" that the $15,000 payment was just a loan. I would accept that there does not seem to be strong ground for using the expression "coincidence" in this context. I would therefore accept that the judgement can be criticised on this point. I move on to the next part of this point, which is concerned with the judge's reference to the defendant being an experienced business man and the unlikelihood of his giving a loan for $15,000 to a new acquaintance who had been described to him as "a nasty man" who was always in financial difficulties. It seems to me that that is a point of considerable substance and a very reasonable basis for the judge's decision regarding the defendant's version of this transaction. There were two further points advanced by Mr. Cheung in support of the appeal. One was that in December 1987, when it is alleged that the plaintiff made his agreement with the defendant, there was not any written rental agreement. That clearly was a very material consideration. Again the plaintiff gave his explanation for the absence of a rental agreement, or of any receipts at that stage, by reference to what he described as the defendant's story about a joint venture which would eventually enter into the agreement. Mr. Cheung submitted, not with any great conviction as it seems to me, that the evidence indicated that it could be concluded that there was merely a "reservation" or an option here in respect of the premises and that it was never intended that there should be an immediate tenancy. My only comment on that is that it was never pleaded or alleged in the defendant's case. It seems to me that it is too late now to advance a contention of that nature. Finally reliance was placed on the fact that there was no evidence that the plaintiff had ever demanded a return of the two keys which he said he had given to the defendant. Again there is nothing on the record to show that the plaintiff was given any opportunity to deal with that point. It was never put to him in cross-examination. That being the situation, it seems to me quite wrong for this court to draw any conclusions based on that point. Mr. Cheung himself accepted that one could not speculate on this matter. Those are the reasons advanced in support of the appeal which I have dealt as fully as I can. It seems to me that they do not add up to any matter of substance. Accordingly, this being a case where the judge's decision is based on his assessment of the credibility of the witnesses, I would dismiss this appeal. Cons, V.-P.: I agree with my Lord and add a few words of my own only because the defendant appears to be particularly aggrieved that he lost the case below. The judge was faced with the evidence of two men, one of whom was obviously recounting matters not as they had really happened. It is up to him to decide which of the two stories he thinks is more likely to be true and not necessarily is true. It is of course possible in those circumstances that he will make a mistake, but this court will only interfere with a decision of that kind if it is shown that his decision on the evidence is obviously wrong; (and that clearly is not the present situation and is not being suggested,) alternatively, that he misled himself in some way. It is suggested in this appeal by Mr. Cheng that the judge did mislead himself in several ways, but only three matters have really been pressed before us this morning. The first relates to the plaintiff's previous convictions. I agree with my Lord. For my part too, I am not persuaded that the judge did overlook those previous convictions. He did not deal with the character of either the two men as such; and he had been reminded of those convictions by the submission of the defendant immediately before he retired to consider his judgment. The second matter is the undoubted fact that the defendant was out of Hong Kong on the 20th March which is the day the plaintiff said he spoke to him. Setting aside that the judge may well have been dealing with that matter when he referred to minor discrepancies in dates in his judgment, the evidence when it is looked at does not show that the plaintiff alleged that the conversation on that day was personal or face to face. His evidence is quite consistent with the conversations having been conducted by telephone. With respect I do not think Mr. Cheung made good that submission. The third matter on which the judge is criticised is his view that the defendant was unlikely in the circumstances, as he knew them, to have lent $15,000 out of sympathy to the plaintiff. Two things I would say on that - firstly that, although it is really immaterial, I think I would probably have taken the same view, had it been up to me, of the defendant's evidence on that point. Secondly there was a third reason which influenced the judge, which has not been challenged and has not even been mentioned. It appears on p. 15 of the bundle where, in the third paragraph the judge points out that the defendant was on that date actually looking for office premises to rent. For these reasons I agree with my Lord that the appeal should be dismissed. Kempster, J.A.: Agreeing, as I do, with all that has fallen from my Lords, I too would dismiss this appeal. (Sir Derek Cons) (Michael Kempster) (P.G. Clough) Vice President Justice of Appeal Justice of Appeal Representation: Timothy Cheung (M/S Wong, Poon, Chan, Law & Co.) for Appellant Young King Ming, Respondent, in person PAGE PAGE - - &`#$ &`#$ CACV000171/1990 Normal.dot Judiciary Hong Kong SAR Microsoft Word 9.0 Judiciary Hong Kong SAR CACV000171/1990 Title Microsoft Word Document MSWordDoc Word.Document.8 CACV000171/1990 Normal.dot Judiciary Hong Kong SAR Microsoft Word 9.0 Judiciary Hong Kong SAR CACV000171/1990 Title Judiciary Hong Kong